create a punctuated skyline with the 1000-foot tower at the transit center and with the endpoints of the ring kind towers on the left and the trans america on the right -- the rincon towers on the left. it is also important to mention what this will actually resolved. under current zoning, there's about 6 million square feet of office space. we will be adding over 2 million square feet of that so that the total we get between office, housing, retail, and hotels basis is almost 9 million square feet, which is about a 4 million square foot increment over what current zoning allows for us. i think it is important to recognize that this is being built not in some far distant part of the city but in exactly the parts of the city where high rises exist today and where we have the transportation infrastructure to support it. it will include major improvements of the streets and sidewalks, which we know will be

desperately needed in that area and it will also include 11 acres of public parks, over half of which is on the terminal being built by the tjpa. importantly, it will also include a funding mechanism to help pay for all this. we can realize a net present value of over $250 million to support the transit center through the development in the area as well as fees which will help support the park and open space improvements over time. moving on, i just wanted to mention a couple of other plans and projects that we are working on. in particular, the central corridor. the central corridor is our name for the planning effort that we are focusing on along fourth street. to support and be supported by the investment that the city is

making in the central subway. this is an area of town that is kind of sandwich between downtown western soma, the tenderloin, and it is also an area that will see tremendous growth and development over the next couple of years. we are trying to capitalize on the transit investment, but here, rather than in some of the recent plans, our focus is going to be on job-producing space. as you have all seen and as we have seen with the rents now being realized south of market, we believe there is a growing demand for companies who want to be in the city but do not want to be in a downtown high-rise. this gives them an option. as mission bay gets built out, we believe this is an incredible opportunity to accommodate businesses who want to be in the city, want to be in large offices, want to be on the edge of downtown but not in downtown.

we are already seeing tremendous interest in this area in a number of ways. we will be looking for your help and support over the next couple of years. we believe this is an important next step. in working with that neighborhood and all of you, we think this plan can be realized by the end of next year. finally, i want to make a plug for our recently adopted better streets plan. it is a plan that really covers that area that development does not occur on the, which is those areas of our city that are occupied by our streets and rights of way. this is 25% of the land area of my city. -- of our city. it occupies more land area than the other streets combined. this plan that was adopted by the board last year actually creates a template and a guide for how we create better >> i think we're approaching an interesting new era in the

city's history pit of the projects that you will hear about today are projects that truly represents a new era in the city's history. i am also seen, almost four years here, we're also seeing an interesting new dynamic in the city and in city government that i have to mention. my colleagues here, monique, ed, jennifer, and others have really formed a partnership to recognize the benefits and the value of working together. as was said earlier, all things are connected. it is my job to make sure that we connect those things that we are all working on and making sure that, at least through stronger growth, more equitable and sustainable growth for the city for the future. i am optimistic. and i think i would like to ask you all in -- you all to join a sign that optimism in the

future. thank you. [applause] >> thank you. and we appreciate the connecting of all these dots for us. we asked charlie to talk about the twittery fact on market street and why shorenstein has made such a significant that on midmarket with its purchase of the former san francisco furniture mart that is now going to have twitter headquarters. he has been with shorenstein since 1995 and manages of the company's acquisition activity in the investment performance of all of the assets throughout the united states. big job, bigger than i am describing, but he is really looking at the whole investment performance of all properties for shorenstein. great to have his perspective on midmarket and the real-estate market two please welcome charlie from shorenstein. [applause]

>> well, thank you. i am glad i am speaking ahead of the america's cup, because i imagine there presentation will be 10-fold up what mine will be. so hang in with me here. to try to give context to midmarket, i would try to say a few words about san francisco in general. a quick, easy slide. vacancy rates in san francisco is slightly above 13%. this is city-wide. if you go sub market to sub market, it can change quite a bit. the low point for landlords was 2007. we had single-digit vacancy. during that time, you would see some rental rate growth. we have been pretty fortunate as far as cities across america ago that we have had four positive quarters of absorption out. absorption really measures the underlying size of the office- using tenant base in san francisco.

what that really means is job creation in the office-using sectors. we obviously could use a few more quarters of positive absorption. vacancy rates, once they get to around 10%, you see that landlords and tenants are on equal footing. this next slide here shows leasing velocity. leasing velocity really is a measurement of -- it can be a good measurement of what people are feeling about the business climate. when things are slow, when you're in a recessionary period, most tenants are uncertain about their business future, and they will put off making major financial decisions often for five to 10 years. what we saw in 2007 is hardly anything that done in the leasing market. it is not surprising. if you go back many cycles, that is what happens. what we have seen in the last

year-and-a-half is greater clarity of business future for many of the occupants in san francisco, and they are willing to make financial commitments. shorenstein saw this as an indicator that the market was starting to turn. in contrast to that was midmarket. depending on how you draw the lines of the various sub markets come amid market usually gets thrown into the civic center or a van ness corridor sub market. clearly the hardest-hit sections of san francisco. historically, it was always very well-leased. it was buoyed by government, both federal government in city government and in large corporations. in the last several years, you have had a large move out from aaa of close to 400,000 square feet. a state, was triggered 50,000 square feet. bank of america has moved out of close to 1 million square feet. then you had the accidents of the west coast merchandise mart

and market square, which was a million square feet. so this market really is a challenge right now. you think, why invest there? but we saw it as an opportunity to do something that was a little bit unique for us. we could put all of the resources of the shorenstein organization to work in one asset in our backyard and hopefully make a difference for the neighborhood. we also saw it as an area of town that the mayor, who we spoke to today, he is out in front of this. he has made this a very important plank in his platform. it is not often that you have the opportunity to be alongside a city government that is helping a blighted area or troubled area to pull out of it. if i focus on where it is for a moment, market square is a full

city block between ninth and 10th street. what we like about this is the investment that has already happened in the neighborhood. over the last five years, there has been about 2500 residential units developed in the neighborhood, and over the next five years, there is 1500 to 2,000 slated to be developed. i think the largest of which is the crescent heights project at the corner of attend that market. i believe it is a two-hour property for 750 units of 4-rich residential. i am told a the first units will be available in 24 to 30 months. that is pretty exciting. it is a neighborhood that i think we'll really turned the corner over the next five to seven years, went to see all this residential built. what we have seen nationwide is

a movement towards properties that are a little bit different than the high rise class a office space. what we have seen their tenants, particularly young tech tenants, like to differentiate their companies by going into creative office space. it is a combination of things. they want wide-open floor plans, high ceilings. they want something that is a little bit different than being in a rectangle cuba. they also want to be in an environment that has close proximity to housing, public transportation, and would be supported by amenities that allows them to have this live, work lifestyle in close proximity. we think that, over time, midmarket will allow that. market square is a two-building complex, about 1.1 million square feet of space. the larger of the two buildings is 1355 market. it was originally constructed in 1938. it was added onto in the 1940's,

1950's, again in the 1960's, and finally in the 1970's. today is 11 stories, about 750,000 square feet. the second party to this project is 875 stephenson. i do not have a good picture. i do not think there is a good picture of it. [laughter] so that is going to be our next challenge, a kind of phase two of the project. we're looking at reece getting the property so it is something that is a little more attractive than it is today. phase one, 1355 market, we're pretty excited about. it is a property that we were fortunate enough to have twitter become interested in. and with the mayor's help, we were able to get a lease transaction done at the property. i have got to think twitter for being a good corporate citizen and being willing to come to a neighborhood that historically is not one that people are looking to go to. but i think over time, it will be maine and maine for a lot of

tech tenants in san francisco. they have taken 220,000 square feet, and hopefully over time they will even double in size. the property, if you had not had a chance to tour it, give myself or someone else involved. we would be happy to bring you through. what is really neat about this property is there is an opportunity for us to blend the old architecture, many art deco touches throughout the property, with brand new infrastructure, and turn it into a class a office building. we have had some success in new york city with a property that was a 2.former industrial buildg that has been turned into office space. it has been successful over the years. we have seen other developers to projects like this in chicago, elsewhere in new york, and their plan the examples in san

francisco. -- there are plenty of examples in san francisco. market square is a unique opportunity for us, again, to put to work all of the shorenstein resources. the property, over the last five years, has been close to 100% vacant. there are a few city uses in there now. but it has been struggling since the merchandise mart laughed. the shorenstein brand is a national real-estate investor. but really, i think our brand is the strongest here in san francisco, where the roots of the company are. here, we have an opportunity to invest at least $80 million into renovation. and spend a lot of time leasing the property, something we have been able to do over good cycles and bad cycles in san francisco. and the space is definitely different, which is not what the

shorenstein companies typically known for doing. but we have had success in other markets doing it. we think that there's this big demand sector that is growing in san francisco for creative office space. it is not just tech. it is advertising, architectural firms, and consulting. so we're pretty excited about the project. lastly, i think that what really made us keenly interested in this project is an opportunity for a grenade -- brand-name company like shorenstein to make a significant investment into a troubled area in san francisco. and we're very thankful to twitter for hanging in there with us, and i think that they legitimized the project. it's proof of concept from day one, and i think they will be

applied piper for other tech firms to come to the neighborhood. that will benefit not only us, but the surrounding buildings and a neighbor heard that are struggling from vacancy right now. i encourage everyone to come by and see our project, and i hope that in five years' time we have a lot of residential surrounding us and a well-leased property, and it is something that the city, the mayor's office, and the shorenstein company can be very proud of. so thank you for your time today. [applause] >> and treader moves in in mid- 2012, and i think we will see that as such a transformer the catalyst to that region. so thank you. in addition to the twitter effect on midmarket, there is no doubt that the salesforce.com announcement for the massive mission bay campus headquarters at a big effect. in fact, i heard a brokerage

china basin saying he was playing a lot of golf. -- before that happened, and he is here was kind of on fire after that. so many deals as a result of that excitement that was created in the synergy. again, i am not going to -- you have heard a lot about it. now we're going to get into depth about what this very sense of place that is going to be created at this wonderful campus. so please welcome bruce francis, the chief messaging officer and salesforce.com. he will describe the unique design characteristics and some of the impact that this campus at mission bay is going to have. it will certainly mean a lot of jobs. he is responsible for helping define and shape salesforce.com's strategic direction worldwide and has helped least -- release the launch of almost every salesforce.com since he started

at the company. please welcome bruce francis from salesforce.com at mission bay. [applause] >> good morning. it is great to be here, to have a chance to talk about a project that is going to be court to sentence is ago, we hope. and it is very important to the success of salesforce.com. we're going to take a couple of minutes to familiarize you with the company. wherever we go in san francisco, we're still introducing ourselves. to have any customers in the room? the rest of you are prospects in our view. [laughter] so i hope you'll pay attention to the next few minutes, just a couple slides on what salesforce is. any time we speak anywhere, we are a publicly traded company. i want to remind you of our safe harbor statement. if you cannot read it all there

right now, why don't you take a look at it. it is on our website. we encourage you to go there and check it out. every company has a mission. our mission salesforce mission .com is to be the -- our mission at salesforce.com is to the the evangelista cloud computing. do you know ellicott computing is? if you have used amazon and.com, you have used cloud computing. it is really taking over at businesses manage and share their information, and increasingly collaborate. and we have been growing at a rapid rate since we were founded in 1999. we recently passed a $2.1 lynn annual revenue -- annual revenue, and we have about 100 two thousand customers worldwide. it is this kind of growth that we have been experiencing that

is behind hour drive to build the new campus. we need to attract and retain the smartest software engineers, the best sales people, the most kick ass marketers we can get so they will have a home for future success in san francisco. the cloud computing model has taken off with businesses, because it has a few key attributes that everyone can relate to. first of all, a it is multi- tenant. just like i will have to tell a real estate crowd that you have multiple to annette's in the commercial real estate building -- multiple attendance in the multiple -- commercial real estate business. the sharing key services, they do not have to worry about. the plumbing, electrical, elevators, all the keys services are there, get you had your own private and secure operation. that is the way it works in the

clout with business information. of course, you get automatic upgrades. what version of the amazon the you use? you do not know. it is always there. always the best version with the most features. it is easiest to use. always there. that is true for salesforce and becloud computing. it works in real time much faster than what you would expect from enterprise software. how many times that even on the phone with a customer service help desk and they said, well, my computer is running at levels low today -- that is the slow lack of real time capability that you find in traditional enterprise software. salesforce.com, during this time of growth, has become the enterprise standard for cloud computing. we serve large businesses. but over time, we find that our own mix has been pretty stable.

it third, third, a third, small, medium, and large companies. but you look at the consumption of resources. a company building and maintaining its own private data center is tremendously inefficient. uses a tremendous amount of electricity to heat, cool, and build in all the redundancies. cloud computing, because it is a shared resource, it is much more efficient and much greener than typical enterprise technology. we're proud of the fact that we have been recognized by just about every analyst firm, every technology publication in the world. most recently, in august, forbes magazine called salesforce.com the most innovative company in the world. we're grateful for that recognition. most important to our identity as a company is the salesforce.com foundation. that was founded that moment

one, when mark parker, frank, and they've got together in that hotel room, rather, that apartment on telegraph hill. they decided to set aside 1% of employee time, 1% of the company's equity, 1% of the product to be available to non- profit to help them manage their organization. over time, that meant more than 270,000 employee hours. remember, it is still a small companies. impressive numbers. and 12,000 nonprofits globally. of course, in san francisco, it has been a particular focus for us. we help run nonprofits like a great family services agency, which has been working with the city's mental health patients here and helping to track outcomes and actually deliver services more efficiently. we're very proud of that. the big idea that salesforce is

about right now is sending that we're seeing in our daily lives. how many people have it twitter account or facebook page? something like that? just about everyone here does. but when you get to work, you're not seeing that, right? some companies are kind of listening in to what is going on on twitter or they might have a facebook page for the company. but the information that customers are using and sharing with each other on the outside somehow never gets in to the systems used for the business. this is what we're calling the social divide. our solution is something called the social enterprise. where it all starts with the customers social profile, so you get a complete view of what the customer is doing on social networks, their interactions with your products, their statements about what is going on in their lives. a little structural failure here on the podium. i will not take a lot of time

getting into this concept here of the social enterprise. but we think it is going to change the way companies manage and share information and collaborate, both internally and with their customers in the future. and i encourage you, if any of you are interested in hearing more about this, we would be happy to arrange a meeting with your team to see how we can help you manage your company. so let's take a look at salesforce.com and mission bay. we are a fast-growing company, and we need to plan for the next phase of growth. we have about 6500 employees worldwide right now. and we need to find a place that will be their home for the next few years. in fact, we are realizing right now that we're going to need to take some interim space, substantial interim space in san francisco to meet the gap.

because building a new campus from square one is going to take some time. here is the plot that we're talking about, over here on mission bay. this is the designated area. you can see the designs put into the current picture. the main feature of the campus, maybe you have seen a little bit of this in the san francisco business times for the chronicle, is the town square. unlike a lot of technology campuses, we wanted to build a campus that brings the city into our campus and our campus into the city. we felt that that interaction was very important. good for our employee. good for the city as well. we're not going to build an employee cafeteria. we're not going to separate our employees from the city. that interaction is healthy.

it builds a neighborhood, not just a campus. and their reaction that we have had from the citizens advisory committee in mission bay has been just terrific. we do not want to build an open and unused plaza in either, so you see these designs incorporate private spaces, public spaces, intimate spaces with in this large public square. of course, water is a continuing theme that you will see throughout the campus. and as we mentioned earlier, sustainability is a very key value for us. we are seeking lead plan and certification for the new campus. we will have a number of sustainable features here. we are exploring the mall now in our design phase, including geothermal, chilled been, and solar panels on the roof. we also wanted to take advantage of the old fashioned

sustainable ideas, like using a natural light in the spaces and have windows that really opened to provide ventilation. we're very, very keen on investigating new technologies, as well, for power generation right on site, including some of the ones i have talked about already. this is a view of one of the interior is bringing some of those key things in, drawing the light down and inside, making for a very green and stimulating environment. you have also seen throughout these designs, at the -- these approaches to create buildings that share a common theme and relationship to one another better not uniform in shape and size. this is a view along the third straight quarter, which gives

you a good idea of the mapping you will see. we're not building tall towers here. we want to encourage collaboration between employees. and we're making liberal use of color. i think that was one reason we clicked from the very beginning. we saw the desire to reflect in this new campus the kind of color that we see everywhere in san francisco. this is not going to be boring granite and green glass architecture, i promise you. there couple other views you see with the splashes of color. i hope you will follow up with us and give us your questions. and i will leave you with a couple more views. i particularly love this purple tower. i call that the cheese grater. [laughter] i do not know what the key term for that is. and here we're stepping back